What Is Creditworthiness?
Creditworthiness is a term that describes how worthy a borrower is to repay and receive a line of credit. Lenders look at your creditworthiness before approving you for loans.
In order to find this out, lenders check your credit score, credit report and most importantly, your repayment history. Your repayment history contributes 35% of your credit score. Timely payments of your credits are the major tool to measure one's creditworthiness. It is always advised not to miss your payments or repay them late. Lenders look for any history of late payments and defaults and this information can have a major impact on your credit score. Hence, it is important to always make your payments on time in order to maintain a good credit score.
The factors responsible for increasing your credit scores are also responsible for increasing your creditworthiness. Below are some of such factors that affect your creditworthiness:
Determination of Creditworthiness
Creditworthiness is represented numerically in the form of a credit score. A Credit score is a three-digit number that is the summarized version of your credit report and credit history. And, these detailed research on the creditworthiness is being performed by a credit bureau.
Though, there are a large number of companies that research on the creditworthiness of individuals. But mainly there are three credit bureaus that are currently operating in the country. These are - Equifax, Experian, and TransUnion.